Long term Care insurance Washington State Is Washington State requiring long-term care insurance?
On April 21, Washington State Gov. Jay Inslee signed into law the Long-Term Services and Supports (LTSS) Trust Act, creating the WA Cares Fund and making Washington the first state in the country to adopt a mandatory, public, state-run long-term-care (LTC) insurance program for workers.
How much does long-term care cost in Washington State?
In Washington State, the average cost for 3 years of long term care is $394,200 ($131,400 per year) at 2020 rates. That cost is projected to be $711,969 ($237,323 per year) in 2040.
HOW DOES THIS LAW EFFECT EMPLOYERS WITH OPERATIONS IN WASHINGTON?
The WA Cares Fund will be funded by employee premiums via a mandatory payroll deduction. Beginning Jan. 1, 2022, employers are responsible for collecting and remitting these employee premiums, as well as submitting a quarterly report of these premiums, to the Washington State Employment Security Department (ESD).
HOW WILL THE WA CARES FUND BE FUNDED?
Starting Jan. 1, 2022, ESD will assess each individual employed in Washington a premium based on the employee’s wages equal to $0.58 per $100 of earnings (i.e., if employees earn $750/biweekly pay period, they would be assessed a $4.35 biweekly premium). The premium rate will be reassessed every other year beginning Jan. 1, 2024, but is capped at .58 percent. The employee’s employer will withhold this amount and pay it to the WA Cares Fund. All Washington employees must contribute to the LTSS Trust, unless they are approved for an exemption (see below).
IS THERE A CAP ON EITHER THE EMPLOYEE PREMIUM OR THE BENEFITS AN EMPLOYEE CAN RECEIVE?
Notably, there is no cap on the employee premium collected. Thus, highly compensated employees will contribute more to the Fund based on their earnings, yet they will only be eligible to receive the same lifetime benefit of $36,500, indexed for inflation, as all other employees. Employers may want to flag this feature of the law to their employees, especially given the fast-approaching deadline to opt out of the WA Cares Fund (Nov. 1, 2021).
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